“End ECB dictatorship”; says Protestor attacked Mario Draghi at Press Conference

Mario Draghi, the head of the European Central Bank, has been attacked by a protester during his press conference on Wednesday.

A woman jumped in front of Mr Draghi at the start of his interest rate press conference on Wednesday, yelling: “End ECB dictatorship”.

The woman, who has not been named, dropped a shower of papers over the ECB president, who was forced to avoid the flurry. No-one was hurt and Mr Draghi was seen smiling after the incident occurred.

It came as the European Central Bank held its key interest rates steady as expected at its policy meeting on Wednesday, as signs multiply that its monetary medicine is slowly beginning to work.

The ECB’s governing council, meeting a day earlier than usual because of the meetings of the World Bank and International Monetary Fund at the weekend, voted to hold the benchmark “refi” refinancing rate steady at its current all-time low of 0.05 percent.

The two other key rates – on the deposit and marginal lending facilities – were also unchanged at -0.2 percent and +0.3 percent, respectively.

ECB chief Mario Draghi was expected to explain the reasoning behind the decision at his usual post-meeting news conference.

But analysts said he was unlikely to announce any new changes in policy, but will underline instead the positive effects of a raft of different policy measures recently, including a contested sovereign bond purchase programme launched last month.

And he will be at pains to emphasise that there are no plans to “taper” the measures any time soon, analysts said.

“After leaving interest rates on hold today, the ECB is likely to dampen speculation that its quantitative easing programme may not be implemented in full,” said Capital Economics economist Jessica Hinds.

Quantitative easing or QE is a massive 1.1-trillion-euro ($1.2 trillion) sovereign bond purchase scheme aimed at bringing area-wide inflation back up to levels consistent with healthy economic growth.

Under the programme, the ECB aims to buy 60 billion euros of bonds per month until September 2016.

The scheme has its critics, not least the head of the German central bank or Bundesbank, Jens Weidmann, who fear it will lessen pressure on governments to get their economies and finances in order.

Opponents are likely to argue for an early roll-back of the programme as the eurozone recovery picks up speed.

But Hinds at Capital Economics said she expected Draghi to quash such arguments.

“Draghi is likely to express satisfaction that the ECB met its target of 60 billion euros of asset purchases in March. And he will almost certainly point to the positive impact on the economy, such as the continued low level of the euro and the recent improvement in both the business surveys and the hard data, while playing down fears that it will cause asset price bubbles to develop,” the expert said.

However, she expected Draghi to downplay recent comments by some members of the ECB’s governing council who suggested that all the positive data mean that the ECB will not need to fulfil its promise to buy 1.1 trillion of assets by September 2016.

In the minutes of the last meeting, the governing council argued that full implementation of QE would be required to achieve the recovery in economic growth and inflation envisaged by the ECB, Hinds pointed out.

“We continue to think that even with QE, eurozone growth will be too slow to make significant inroads into the spare capacity in the economy and eradicate the threat of deflation. Accordingly, we think additional monetary policy support may be needed beyond September 2016,” Hinds said.

At the news conference, Draghi was also likely to face questions about Greece and whether the ECB will continue to allow a steady increase in emergency liquidity for the Greek banking sector, analysts said.

Source: Telegraph & Agencies

Comments
Loading...